Sunday, December 30, 2007

Lanco in tie-up talks with global operator for non-metro airports

Hyderabad: Integrated infrastructure developer Lanco Infratech Ltd, a company with interests in power and construction, is in talks with an international airport operator to be a partner as it bids for new airport contracts in small Indian towns.
High-flyer: Lanco group chairman L. Madhusudhan Rao says he expects the deal with the operator to be firmed up soon.
“The global airports operator that we are currently talking to has an experience of handling close to 60 million passengers a year, and is now operating three airports globally. We expect to firm up the deal very soon,” said Lanco group chairman Lagadapati Madhusudhan Rao.He declined to name the global airport operator. Lanco, with Rs1,647 crore in revenues last fiscal year, had in the past held talks with Houston Airport Systems, the fourth largest airport operator in the US, to be a partner, but did not conclude a deal, said Sanjay Diwakar Joshi, executive director at Lanco.
Lanco, based in Hyderabad, is the fourth infrastructure firm from the region to enter the airport development sector, as the Union government opens up airports in metros and smaller towns to private players. The others are GVK Power and Infrastructure Ltd that runs the Mumbai International Airport, GMR Infrastructure Ltd that operates the airport in New Delhi and is building the new airport in Hyderabad and Nagarjuna Construction Co. Ltd-Maytas Infra Ltd combine that has won contracts to build new airports in Shimoga and Gulbarga in Karnataka.
In August, Lanco won a Rs83 crore bid to modernize the airport at Varanasi in Uttar Pradesh. The contract includes expansion of the runway and improvement of passenger amenities to be completed by December next year, but the firm won’t operate the airport.
“(Airports) will be natural extension for real estate and construction companies since it provides for real estate opportunities,” says Kapil Kaul, chief executive of the Centre for Asia Pacific Aviation, a consulting firm.
Lanco has submitted pre-qualification bids for a Maharashtra tender to convert airstrips in six smaller cities into airports. These airstrips include Nanded, Osmanabad, Latur, Yavatmal, Baramati and Jalgaon. Once the firms are selected, a request for proposal tender would be floated in January, and contracts expected to be awarded by June.
These airports would be initially used as a maintenance and parking facility to run aviation academies and eventually be turned into commercial airports.
“We will not be seriously pursuing all of them. We may choose to develop only a few viable ones among them,” said Lanco Infratech managing director G. Venkatesh Babu.
Of the two airport projects announced by the government, in Amritsar and Udaipur, the first among 35 non-metro airports under the public-private-partnership model, Lanco is keen on bidding for just the Amritsar airport, Babu said.
Lucknow, Varanasi, Ahmedabad, Patna, Jammu, Kolkata and Chennai are among the 35 non-metro airport projects being considered by the Centre. In these projects, successful bidders would be responsible for commercial exploitation of airport area through hotels and conference centres.
The other components include running parking lots, commercial spaces within the terminals and also managing the terminals.
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